NEW YORK: The brutal March that battered some of the world’s biggest hedge funds is already fading into the background as the firms reported their strongest first-half results in five years.
Many firms were buoyed by their tech-focused bets and rode the wave in chip stocks that notched their best quarter ever in recent weeks.
Others minted billions off a series of moves that were especially beneficial to index-rebalancing strategies, such as the fast-tracking of SpaceX onto Nasdaq Inc and FTSE Russell benchmarks.
Take Marshall Wace’s Eureka.
It advanced 6.7% last month, driving gains for the first half of the year to 19.9%, according to sources.
D.E. Shaw’s macro-focused Oculus fund rose 5.6% in June, pushing its performance for the first half up to 27.4%, other sources said.
They joined other big winners such as Whale Rock Capital Management, whose 72.5% gain was largely fuelled by positions in semiconductor firms and a bet on Anthropic PBC.
Appaloosa Management’s 32% return was propelled largely by investments in the memory-chip sector, which soared this year on demand for artificial intelligence (AI) computing.
Just two teams focused on trading index changes at Millennium Management made about US$3.7bil between them in June, lifting the multistrategy hedge fund’s monthly gains.
Altogether, hedge funds returned 7.2% on average in 2026 through June 30, the strongest first half performance since 2021, according to research firm PivotalPath.
Hedge funds focused on tech stocks led the way, with a 27% return on average.
The firms were rebounding from a tough March, when the war in Iran essentially halted shipping traffic in the Strait of Hormuz, sending oil prices higher and stoking worries about inflation.
Earlier in the year, a sharp software selloff spurred by fears of AI disruption had also caused heavy losses at some hedge funds.
They’re also benefitting from soaring interest in hedge funds, driven in part by consistent performance in recent years as other alternative asset classes such as private equity disappointed investors.
Since January 2020, hedge funds have compounded at 8.5%, according to PivotalPath.
“This consistency in performance is why they are seeing renewed appetite for hedge funds now, especially with issues in private equity and credit,” PivotalPath head Jon Caplis said.
Not every hedge fund is faring well in this environment.
ExodusPoint Capital Management lagged behind multistrategy peers in June, inching 0.2% higher for the month, which put gains for the first six months of the year at 4.3%, according to sources.
Meanwhile, quantitative hedge funds are having their worst run since 2023. — Bloomberg